FountainCourt Homeowners v. FountainCourt Develop.

St. Paul Fire v. McCormick & Baxter Creosoting established that even if property damage begins to occur before the insurance policies are in effect, the policies are “triggered” when the damage is ongoing during the policy periods.

American Family Mutual Insurance Company (AFM) appealed the court of appeals’ decision that upheld a trial court judgment in a garnishment proceeding requiring AFM to pay a judgment that plaintiffs FountainCourtHomeowners’ Association and FountainCourt Condominium Owners’ Association (FountainCourt) had obtained against AFM’s insured, Sideco, inc. (Sideco). Specifically, AFM argued that the damages found by the jury in the underlying proceeding are not “property damage” as defined in the insurance policy, because the damages in the underlying proceeding could have included the costs of repairing “defective work” by Sideco, and “defective work” does not constitute property damage. In addition, AFM argued FountainCourt was obligated to, but could not, establish that the damage was caused by an occurrence within the periods covered by the AFM policies. This Court finds that the jury in the underlying proceeding was not instructed to award damages for “defective work,” only to award damages for “physical damage.” This Court also finds that although the damage at issue began to occur before the policies were in effect, the policies were “triggered” because the damage was ongoing during the policy periods. St. Paul Fire v. McCormick & Baxter Creosoting, 324 Or 184 (1996). The decision of the court of appeals is affirmed. The supplemental judgment for garnishment is affirmed.